May 21 (Reuters) - Apparel and home-furnishings retailer Bon-Ton Stores Inc (BONT.O) posted a wider quarterly loss as sales fell, but said gross margin rates improved and spending reduced, sending its shares up 20 percent.

Floral print dress by dBy Ltd, Bon Ton Spring 2009

Bon-Ton, which ended April with excess borrowing capacity under a revolving credit facility of $165 million -- above the required minimum of $75 million -- also said it is on track to meet its goal of $70 million in annual savings.

The company said gross margin rate rose to 34.8 percent of net sales for the quarter, from 34 percent a year ago, helped by "disciplined" inventory control.

For the latest first quarter, the York, Pennsylvania-based company posted a loss of $45.4 million, or $2.67 per share, compared with a net loss of $34.1 million, or $2.03 per share in the year-ago quarter.

For the first quarter of fiscal 2009, comparable store sales fell 8.6 percent while total sales fell 8 percent to $644.5 million.

Selling, general and administrative expenses fell $18.9 million to $236.8 million.

The company said it expects comparable store sales to fall in a range of 6.5 percent to 9 percent for 2009, with a minimum reduction of $70 million in expenses.

The company, which operates the Elder-Beerman, Boston Store and Carson Pirie Scott chains, also forecast a full-year loss of $3.40 to $4.30 per share, while an analyst was expecting a loss of $4.25 a share.

Shares of the company were up 19 percent at $5.00 in pre-market trade Thursday 21 May. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)